Vascular precursor cells include stem cells and progenitor cells giving rise to all mature cell types in the wall of blood vessels. When tissue injury occurs, local hypoxia and inflammation result in the generation of vasculogenic mediators which orchestrate migration of vascular precursor cells from their niche environment to the site of tissue injury. The intricate crosstalk among signaling pathways coordinates vascular precursor cell proliferation and differentiation during neovascularization. Establishment of normal blood perfusion plays an essential role in the effective repair of the injured tissue. In recent years, studies on molecular mechanisms underlying the regulation of vascular precursor cell function have achieved substantial progress, which promotes exploration of vascular precursor cell–based approaches to treat chronic wounds and ischemic diseases in vital organ systems. Verification of safety and establishment of specific guidelines for the clinical application of vascular precursor cell–based therapy remain major challenges in the field.